Back2Basics: Regulation Z: A Whistlestop Tour

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Question 1 of 10

1. Question
1. Regulation Z applies generally does NOT apply to:
A. Consumer-purpose loans
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B. Secured loans
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C. Business-purpose loans
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D. Unsecured loans
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Question 2 of 10

2. Question

Which of the following will typically be included in the finance charge on a loan?

A. Application fees
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B. Recording fees
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C. Flood determination fees
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D. Rate lock fees
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Question 3 of 10

3. Question
1. In order for a consumer to have the right of rescission, it is not necessary that:
A. The consumer is a borrower
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B. The loan is secured by a dwelling
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C. The consumer is an owner of the dwelling
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D. The dwelling is the consumer’s principal dwelling
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E. All of the above are required
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Question 4 of 10

4. Question
1. To determine whether a loan is a higher-priced mortgage loan (HPML), the bank will look at:
A. Whether the consumer has a demonstrable ability to repay the loan
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B. Whether the points and fees exceed the applicable (annually adjusted) threshold
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C. Whether it is a first or subordinate lien and the difference between the APOR and the APR
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D. Only the difference between the APOR and the APR
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Question 5 of 10

5. Question
1. When determining that it is eligible for the small creditor exemption in Regulation Z:
A. A bank will only need to review its asset size on the prior December 31st
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B. A bank need not consider affiliate activity
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C. A bank does not need to count loans that were sold immediately after origination
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D. A bank will need to determine whether it made any first lien transactions in rural or underserved areas
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Question 6 of 10

6. Question
1. Which of the following is a permissible change-in-terms to a HELOC under 1026.40?
A. Change the margin on a variable rate loan
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B. Change the frequency or rate adjustments
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C. Change the annual participation fee
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D. Change the payment address
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Question 7 of 10

7. Question
1. Which of the following is not an essential feature of an open-end loan?
A. Repeated transactions may be made on the account
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B. POS transactions can be completed on the account with a card or other access device issued to the borrower
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C. The creditor may impose a finance charge on the account
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D. Credit is replenished or made available again to the extent that an outstanding balance is repaid
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Question 8 of 10

8. Question
1. Which of the following would likely be exempt from Regulation Z?
A. A loan for $30,000 to purchase fine art for a personal collection
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B. A loan for the purchase of a single-family home to be used by trust beneficiaries, made to a trust established for tax purposes
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C. A loan for the purchase of a 4-unit rental property that the borrower intends to occupy
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D. A loan to fund the borrower’s child’s education and secured by the borrower’s business property
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Question 9 of 10

9. Question
1. Which would be considered an inaccurate APR?
A. On an irregular transaction, an APR that was understated by 2/10 of a percentage point (.020%)
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B. On a regular transaction, an APR that was overstated by 1/10 of a percentage point (.010%)
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C. On a mortgage loan, an APR that was calculated using a finance charge overstated by $200
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D. On a mortgage loan, an APR that was calculated using a finance charge that was understated by $125
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Question 10 of 10

10. Question
1. Which of the following would be considered a refinancing?
A. Converting a fixed rate loan to an ARM loan that currently has a lower APR
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B. Adding accrued unpaid interest to the loan principal when extending the term of a loan
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C. Reducing the APR and re-amortizing the loan accordingly
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D. Extending the term of a loan and increasing late payment penalties, without increasing principal or APR, as part of a loss mitigation agreement
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